Financial Goals and Targets
Setting goals and targets might sound like homework or something that an accountant should do, but the truth is they can really help you, and here's how:
In business, people and companies always make targets and plans. Why do they do this? It's not just in order to give them something to do, but rather it is mainly done because they work.
Research has shown that those without goals and targets drift a little, and so the goals and targets are needed to help you perform better. And the same with your finances, the fact is if you set goals and targets and try to stick to them and monitor your performance against them, then you are much more likely to maximise your income.
So what can you do? Well experts recommend that you set yourself some short term goals and some long term ones - those that you want to do quickly and those that you want to do longer term.
Here are some thoughts:
- Debt is more expensive than credit, so try to clear off your bills first.
For instance, if you are paying off an overdraft and also saving some money each month, then you should rather pay off the debt in preference - why - because it is costing you more in interest than the positive interest you get on your savings, therefore it is more efficient to pay it off.
- Remember that if you have excess money in your current account it is being wasted, sweep it off somewhere it will get you decent interest instead
- Set realistic but challenging targets - if it is too easy then it won't help you, if it is too hard like saving ten thousand pounds a year on a salary of thirty thousand then you will just get disappointed when you are unable to achieve your goals.
- Review how you are doing from time to time and work out what you need to address or do better and what is going well